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The week ahead: Lloyds Bank, Barclays, Standard Chartered
By David Brenchley | Fri, 21st April 2017 - 16:17
Monday 24 April
Nasstar, Anglo American
Globaltrans Investment, Microgen, Anglo African Agriculture, Biome Technologies, Anglo American
Tuesday 25 April
Elementis, BHP Billiton, St James's Place, Apax Global Alpha, Optibiotix Health, Redstoneconnect, Whitbread, Minds + Machines, Havelock Europa, Circassia Pharmaceuticals
Romgaz, Elementis, Entu, Axis Bank, Metro Bank, Premier Energy & Water Trust, Hammerson, Aggreko
Wednesday 26 April
It's a bumper week for the big banks, starting midweek with Standard Chartered. (STAN)Investec analyst Ian Gordon has upgraded his rating and price target to 'hold' and 685p, which is a smidge less than the stock is trading at close of play Friday.
That's better than his previous target of 595p and 'sell' recommendation, but don't expect much from the numbers.
"We do not expect the Q1 statement to prove particularly transformational," admits Gordon. "Rather, we expect a fifth successive quarter of modest revenue recovery."
Fresnillo, Jupiter Fund Management, London Stock Exchange Group, Standard Chartered, Croda International, Antofagasta, Tullow Oil, PROACTIS Holdings, Redefine International, GlaxoSmithKline, Phoenix Spree Deutschland, Walker Greenbank, U And I Group, Hunters Property
Glanbia, Henderson Group, Devro, Greencoat UK Wind, Admiral Group, Primary Health Properties, Bank of America, Tullow Oil, Telit Communications
Thursday 27 April
In summary, Deutsche Bank's David Lock keeps first-quarter estimates unchanged, forecasting underlying profit before tax of £1.85 billion, down from £2.05 billion a year ago, but up from £1.79 billion in the final three months of 2016.
Expect income to have fallen around 1% quarter-on-quarter, costs to remain flat and impairments nudging higher by a "modest" £29 million to £225 million. That final figure could spring another positive surprise, reckons Lock, given "robust macro" during the period.
As ever, it's net interest margin (NIM), a key performance indicator for the banking sector, and net interest income (NII) that investors will be eyeing closely. Lock tips an improvement in the former to 2.71% for the quarter.
There a plenty of housebuilders reporting this week, and all will have to justify stellar share price recoveries since the EU referendum crash.
Taylor Wimpey (TW.), up almost a third in 2017 so far and currently trading close to a nine-year high, is tipped to have kept up strong trading through the spring selling season.
That gives Peel Hunt analyst Gavin Jago confidence in his top-end forecasts. He also believes management has the scope to materially increase planned cash returns, although he admits we may have to wait until interim results in August to hear anything on this.
There are some big economic events this week, too, with the European Central Bank (ECB) announcing its policy decision at 12.45pm Thursday.
"We firmly expect no change to be made to the main policy rates with the main refinancing rate (refi rate) set to be held at zero, the deposit rate at -0.40% and the marginal lending rate at +0.25%," says Investec.
"Note that QE purchases are now continuing at a rate of €60 billion per month, having run at an €80 billion per month pace prior to April; we expect the ECB to announce no changes to this."
Persimmon, Weir Group, Schroders, Travis Perkins, Meggitt, Taylor Wimpey, Kaz Minerals, Berendsen, AstraZeneca, Aggreko, Lloyds Banking Group, Cobham, Greka Drilling, Howden Joinery Group, Aseana Properties, Havelock Europa, Air Partner, Harvey Nash Group, Gaming Realms, Deltex Medical Group
Minoan Group, Global Invacom Group, Countrywide, AstraZeneca, DP World, LSL Property Services, Jardine Lloyd Thompson
Friday 28 April
UK first-quarter GDP data out Friday might not make great reading, according to analysts.
Investec isn't optimistic. In fact, it can already say "with a fairly high degree of confidence" that quarterly GDP growth last quarter will be softer than the 0.7% quarterly rise seen in Q4.
Back on the companies front, Barclays (BARC) and Royal Bank of Scotland (RBS) bring the week to a close. Deutsche Bank has penned in quarterly pre-tax profit for the former of £1.74 billion and a core equity tier 1 (CET1) of 12.6%. Investment bank performance is expected to be the big talking point, according to analyst David Lock, after a notably strong Q1 performance from US banks in this regard.
"Though Barclays has a tougher credit compared with Q1 2016, we expect FX tailwinds and market share gains in banking to drive a strong Q1 2017 CIB result," he added. He also expects capital to improve 20 basis points, driven by retained earnings.
Lock drops his target price to 250p, from 267p, but still retains his 'buy' recommendation due to the potential 20% upside. "Trading on 8.7 times 2018e earnings per share (EPS), Barclays screens as one of the cheapest banks in Europe," he concluded.
Royal Bank of Scotland, Ultra Electronics, Barclays, Rotork, Vimetco, Jersey Oil And Gas
HSBC, Bank of Ireland
This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.